After climbing to a platform some 40 feet above the busy, sprawling construction site he oversees, Dan Tibbs motions toward the east, to a point far beyond the boundaries of Tennessee Valley Authority's Allen Combined Cycle Plant in Southwest Memphis.

"The lagoons are over there," said Tibbs, manager of major construction projects for TVA.

Barely visible in the distance, the 30 acres of covered lagoons in the Frank C. Pidgeon Industrial Park are used in treating waste-activated sludge, primarily organic material filtered from sewage sent to the city of Memphis' T.E. Maxson South Wastewater Treatment Plant. It is there that the sludge undergoes a process called anaerobic digestion, in which microorganisms break down the solids, creating methane, carbon dioxide and other gases as byproducts.

But soon the lagoons will become something more than part of the waste-treatment process. With investments totaling up to $25 million, TVA and the city will turn them into sources of fuel for the $975 million electrical-generating facility that is slated for completion in June 2018 and will replace the coal-fired Allen Fossil Plant nearby.

The so-called biogas from the lagoons will be piped to the TVA plant and burned to generate an additional 5-6 megawatts of power, enough to serve 3,000-plus homes. Although that production might seem trifling compared to the overall 1,070-megawatt capacity of the plant, it will carry significant financial and environmental benefits, city and TVA officials say.